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&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The Company reports accounts receivable at estimated net realizable values. Substantially all of the Company's accounts receivable are related to providing healthcare services to patients whose costs are primarily paid by federal and state governmental authorities, managed care health plans, commercial insurance companies and workers' compensation programs. Collection of these accounts receivable is the Company's primary source of cash and is critical to its operating performance. The Company's primary collection risks relate to non-governmental payors who insure these patients and deductibles, co-payments and amounts owed by the patient. Deductibles, co-payments and amounts owed by the patient are an immaterial portion of the Company's net accounts receivable balance and accounted for approximately 0.2% of the net accounts receivable balance before doubtful accounts at both December&amp;#160;31, 2011 and December&amp;#160;31, 2012. The Company's general policy is to verify insurance coverage prior to the date of admission for a patient admitted to the Company's hospitals or in the case of the Company's outpatient rehabilitation clinics, the Company verifies insurance coverage prior to their first therapy visit. The Company's estimate for the allowance for doubtful accounts is calculated by providing a reserve allowance based upon the age of an account balance. Generally the Company has reserved as uncollectible all governmental accounts over 365&amp;#160;days and non-governmental accounts over 180&amp;#160;days from discharge. This method is monitored based on historical cash collections experience. Collections are impacted by the effectiveness of the Company's collection efforts with non-governmental payors and regulatory or administrative disruptions with the fiscal intermediaries that pay the Company's governmental receivables.&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The Company has historically collected substantially all of its third-party insured receivables (net of contractual allowances) which include receivables from governmental agencies. The Company reviews its overall reserve adequacy by monitoring historical cash collections as a percentage of net revenue less the provision for bad debts.&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;Uncollected accounts are written off the balance sheet when they are turned over to an outside collection agency, or when management determines that the balance is uncollectible, whichever occurs first.&lt;/font&gt;&lt;/p&gt;
&lt;/div&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for trade and other accounts receivable, and finance, loan and lease receivables, including those classified as held for investment and held for sale. This disclosure may include (1) the basis at which such receivables are carried in the entity's statements of financial position (2) how the level of the valuation allowance for receivables is determined (3) when impairments, charge-offs or recoveries are recognized for such receivables (4) the treatment of origination fees and costs, including the amortization method for net deferred fees or costs (5) the treatment of any premiums or discounts or unearned income (6) the entity's income recognition policies for such receivables, including those that are impaired, past due or placed on nonaccrual status and (7) the treatment of foreclosures or repossessions (8) the nature and amount of any guarantees to repurchase receivables.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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Reference 3: http://www.xbrl.org/2003/role/presentationRef

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

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 -Topic 310

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 -Publisher AICPA

 -Name Statement of Position (SOP)

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

 -Publisher SEC

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&lt;td style="FONT-FAMILY: times;" width="12"&gt;&lt;/td&gt;
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&lt;td style="FONT-FAMILY: times;"&gt;
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&lt;/div&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for property, plant and equipment which may include the basis of such assets, depreciation methods used and estimated useful lives, the entity's capitalization policy, including its accounting treatment for costs incurred for repairs and maintenance activities, whether such asset balances include capitalized interest and the method by which such is calculated, how disposals of such assets are accounted for and how impairment of such assets is assessed and recognized.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

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Reference 7: http://www.xbrl.org/2003/role/presentationRef

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

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Reference 11: http://www.xbrl.org/2003/role/presentationRef

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Reference 13: http://www.xbrl.org/2003/role/presentationRef

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&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The interests held by other parties in subsidiaries, limited liability companies and limited partnerships owned and controlled by the Company are reported as either redeemable non-controlling interests outside of stockholders' equity or as non-controlling interests in the stockholders' equity section of the consolidated balance sheets. The minority ownership interests that are reflected as redeemable non-controlling interests on our consolidated balance sheets consist of those outside owners that have certain "put rights," that are currently exercisable, and that, if exercised, require us to purchase the minority member's interest. Those redeemable non-controlling interests that are currently redeemable or considered probable of becoming redeemable have been adjusted to their approximate redemption values. As of December&amp;#160;31, 2011 and December&amp;#160;31, 2012, we believe the redemption values of the non-controlling ownership interests approximates the fair value of those interests classified as redeemable non-controlling interests. The non-controlling interests' balances reported in the stockholders' equity section of our consolidated balance sheets were $26.7&amp;#160;million and $28.4&amp;#160;million as of December&amp;#160;31, 2011 and December&amp;#160;31, 2012, respectively.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;During 2012, the amounts related to redeemable non-controlling interests have been reclassified on the consolidated balance sheets at December&amp;#160;31, 2011 and the consolidated statement of changes in equity and income for the years ended December&amp;#160;31, 2010 and December&amp;#160;31, 2011 from non-controlling interests to redeemable non-controlling interests. The redeemable non-controlling interests' balances reported on our consolidated balance sheets were $9.0&amp;#160;million and $10.8&amp;#160;million as of December&amp;#160;31, 2011 and December&amp;#160;31, 2012, respectively.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&lt;b&gt;&lt;i&gt;Revenue Recognition&lt;/i&gt;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;
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&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;Patient service revenue is reported net of provisions for contractual allowances from third-party payors and patients. The Company has agreements with third-party payors that provide for payments to the Company at amounts different from its established billing rates. The differences between the estimated program reimbursement rates and the standard billing rates are accounted for as contractual adjustments, which are deducted from gross revenues to arrive at net operating revenues. Payment arrangements include prospectively determined rates per discharge, reimbursed costs, discounted charges, per diem and per visit payments. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods as final settlements are determined. Accounts receivable resulting from such payment arrangements are recorded net of contractual allowances.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;Revenues generated under contractual arrangements are comprised primarily of billings for services rendered to nursing homes, hospitals, schools and other third parties.&lt;/font&gt;&lt;/p&gt;
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